New Law to Require Registration of All Short-Term Housing Rentals

Under a new law — Local Law 18 — that goes into effect on Jan. 9, 2023, anyone seeking to rent out housing for fewer than 30 consecutive days in New York City will be required to register with the Mayor’s Office of Special Enforcement and obtain a registration number. Booking services such as Airbnb and Vrbo will then be required to verify the short-term rental registration number of any accommodation before listing it on their service.

“I love Local Law 18!” says Stuart Saft, a partner at the law firm Holland & Knight and chairman of the Council of New York Cooperatives & Condominiums. “Building owners, including co-op and condo boards, can now register with the city to forbid short-term housing.”

In the past, Saft notes, keeping up with illegal rentals was a losing game of cat and mouse. “Board members would scour web listings trying to detect illegal short-term rentals in their buildings,” he says. “If a shareholder or unit-owner used the apartment as a hotel, we would write to Airbnb or some other service and point out that the renter can’t live there without the consent of the board. And we would prevent the renter from entering the building. It was time-consuming and costly.”

Local Law 18 does not change the underlying rules governing short-term rentals. In buildings with three or more units, it remains illegal to rent housing for fewer than 30 days if the owner or lease-holder is not present during the entire rental period.

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But Ben Kallos, a former city council member who sponsored the original legislation, has estimated that more than 37,000 homes in the city will have to register with the Office of Special Enforcement under Local Law 18. A prime intent of the law is to fight the city’s chronic shortage of affordable housing.

“Housing should be for New Yorkers, hotels should be for tourists,” Kallos states on his website. “We need every apartment being listed illegally back on the market to help our affordable housing crisis. At a time when hotels are closing or sitting there empty, it is crazy to see apartments all over the city getting converted into illegal (hotels).” 

Under Local Law 18, homeowners, co-op shareholders, condo unit-owners and renters will be required to certify that they are the legal owner or tenant, to designate an area for guests, to certify that hosting does not violate the terms of their lease or the law, and to provide the URL for any listings. The city, in turn, will confirm that the home is not in public housing, a rent-regulated apartment, city-subsidized housing or on the “prohibited buildings list” whose owners, including co-op and condo boards, have forbidden short-term rentals.

“In essence,” Saft says, “co-ops and condos can opt out of the system.”

Dennis DePaola, executive vice president at Orsid New York, predicts that the vast majority of the 200 co-ops and condos in the management company’s portfolio will do just that. “This law has been a long time coming, and our clients welcome it,” he says. “Critics feel it’s a law for the rich, but co-op and condo residents of all classes don’t want to endure living next to a hotel room.”

The law has teeth. Fines for hosts who break the rules would range from $1,000 to the lesser of $5,000 or three times revenue from illegal rentals. Fines for platforms would be limited to the higher of $1,500 or the total fees collected from illegal transactions.

Reactions to Local Law 18, the latest skirmish in the protracted war over short-term rentals, have been predictably divided. Airbnb has derided the new law as “draconian.” The Hotel Association of New York, on the other hand, said in a statement that it is “fully supportive” of the new rules. As Saft sees it, “It’s a major step up for everybody — except Airbnb.”